Owners stave off Huntington Hotel auction but future looks uncertain.

The deluxe Ritz-Carlton Huntington Hotel in Pasadena has been given a reprieve from the auctioneer's table but its future ownership is still uncertain.

According to local industry sources, the owners have been given 30 days to work out a refinancing deal with the major financial backers of the hotel. The main lenders had threatened to auction off the property on July 22.

Lary Mielke, one of the general partners of the Huntington Hotel Partners -- the limited partnership that owns the property -- would not discuss specifics but said various options are being considered concerning future ownership.

"We had a difficult opening, everybody knows that," he said. "Right now the hotel is doing quite well but as to what the future will be, I don't know. We are looking at everything and we are currently negotiating with our main backers."

According to local industry sources and published reports, the partnership owes more than $100 million in interest and principal to lenders that financed the rebuilding of the 380-room hotel.

Originally built in 1906 as a major Southern California resort hotel, it was closed in 1985 because it did not meet modern building codes. Local officials said the hotel could not withstand a major earthquake.

In 1987, Mielke and Thomas Tellefsen, two local real estate developers, formed a partnership that bought the Huntington Hotel. The partnership tore down the landmark hotel and built a new one at a cost of more than $100 million.

Ritz-Carlton Hotel Co., an operator of deluxe facilities, was brought in to manage the new hotel that was reopened in March 1991. Since the hotel reopened, there has been much speculation in the local industry about its financial health.

Last week, local analysts said the essential problem is that the cost of operating such a deluxe hotel could not be supported by a market that has been in a steady decline for three years.

Analysts doubted the hotel, built on 23 acres of manicured grounds, would be abandoned or converted to another use. They think the hotel is more likely to be purchased by another hotel operator and converted into more of a mid-range hotel.

Representatives from the hotel's main lender, Dai-Ichi Kangyo Bank in Los Angeles, did not return a phone call for comment.

One local hospitality industry analyst, Donald Wise of CB Commercial, a real estate brokerage, said the Ritz-Carlton Huntington Hotel is for sale.

"The property could be sold," he said. "There are buyers out there, the only question is for how much. I know of one company that has it listed and I know that there are some people out there that are interested in the hotel."

Other analysts said other potential operators could include such mid-level hotel companies as Sheraton or Marriott. The old Huntington Hotel was once operated as a Sheraton.

When the hotel reopened, room rates ranged up to $240 a night, with suites going for as much as $800 a day. Some room rates still approach the $250 a night mark but the average is between $100 and $200 a night, said Mielke.

In May, the average nightly room rate at Los Angeles County hotels was $75.38, according to the latest available information from PKF Consulting, a local hospitality industry consulting firm.

Local analysts said another possible scenario is that the partnership which owns the hotel could go into bankruptcy to forestall a possible foreclosure sale. They recalled that is what happened at the Westin Bonaventure Hotel in downtown Los Angeles in late 1991 when the main lender threatened to foreclose.

In that case, the main lender -- New York-based Equitable Life Assurance Society of the United States -- eventually took over the hotel's ownership when it emerged from Chapter 11 bankruptcy earlier this year.

Mielke would not comment specifically on whether a Chapter 11 bankruptcy filing is being considered. Under a Chapter 11 filing, a business may continue to operate but any transactions must be approved by the U.S. Bankruptcy Court.

The hotel, which once attracted many luminaries from business, entertainment and politics, is considered one of the premiere hotel properties in California.